But rights, like the Supreme Court decisions that support them, are not self-enforcing. In the absence of meaningful remedies to ensure those rights are honored, recent history suggests that those whose interests are threatened by workers exercising their rights will do their utmost to undermine those rights. The weight of evidence suggests that "the wave of union corruption" described by the New York Times is occurring because of weaknesses in the system of laws meant to prevent, detect and punish those crimes. Workers whose hard-earned money is being stolen through union corruption deserve the protection of the law. No credible argument can be made that workers should have less legal protections against corruption than shareholders have against unscrupulous corporate officers. The policies modeled after the Securities and Exchange Commission's safeguards will promote more disclosure, better accounting and a more credible deterrent to union corruption than presently exists. The Supreme Court decisions repeatedly recognizing the rights of workers against compelled political speech are the law of the land, yet the rights are elusive without meaningful remedies. Workers who have no access to reliable information as to what portion of the funds they provide to unions go for collective bargaining as opposed to politics are poorly equipped to exercise their First Amendment rights, especially in the face of harassment, retaliation and and the studied indifference and delay of government bureaucracies to their plight. Congress has the power to provide a workable, reasonable mechanism to ensure that the Constitutional rights of workers are honored. It just needs the will and the political leadership. If the First Amendment, which represents the heart and soul of our political freedoms, is not worth protecting with legislation, what is? The CHAIRMAN. Congratulations, Mr. Boehm, you did it. I am told by staff that it is our friends in the Teamsters who are speaking outside. Ms. Claybrook, good to see you again. We will let you go right ahead. STATEMENT OF JOAN CLAYBROOK Ms. CLAYBROOK. Thank you very much, Mr. Chairman. I am pleased to be here on behalf of Public Citizen's 150,000 members across the country. Lately, opponents of major campaign finance reform bills banning soft money to political parties and regulating phony issue ads have stepped up their insistence that paycheck protection as it is called must be part of any meaningful campaign finance reform bill. I would like to discuss today why the basic assumptions behind this demand I believe are fatally flawed. Public Citizen is particularly well equipped to discuss this and give the committee a broad perspective because in addition to our involvement in campaign reform, our litigation group has spent 25 years representing dissidents in labor unions to ensure internal democracy flourishes. What we hear from opponents of McCain-Feingold and ShaysMeehan is something like this: do not ban soft money, which mostly comes from corporations, without curbing the so-called compelled use of union dues for partisan union political campaigns. Otherwise you will weaken the pro-business forces and enable union-supported Democratic candidates to swamp Republicans. There is little or no factual basis for the various components of this argument, and let me elaborate. First, even without soft money, the pro-business forces maintain an overwhelming advantage over the pro-union ones in contributions to candidates and parties in lobbying expenditures. I have distributed some charts and in fact have some charts on the board that will help elaborate this. Essentially the first chart shows that in the 1998 election cycle, not counting soft money, individuals and political action committees associated with business outspent those affiliated with labor by about 10 to one. [See charts at Appendix 20.] Furthermore, business' advantage in expenditures for lobbying Federal officials is even more astronomical. Unions spent $24 million in 1998; a small fraction of what the business entities spent, which was $1.15 billion. This financial reality helps to explain why a leading business group, the Committee for Economic Development, came out in favor of a ban on soft money without feeling that its interests would be endangered. Second, even without soft money, Republicans have a large campaign contribution advantage over Democrats. Not counting soft money, in the 1998 election Republicans raised $734 million, as our chart shows, while Democrats raised only $533 million. Moreover, the Republican party had an even greater margin of superiority than the Democrats in hard than in soft money. Republicans raised 65 percent of total hard money, but only 59 percent of soft money. It is therefore arguable that the Republican party would gain relative strength by abolishing soft money. Third, the pro-business and pro-Republican groups as well as labor unions can use their treasuries under the law to support partisan organizational campaigns directed at their members or shareholders. Under the Federal Election Campaign Act, corporations, unions, and membership organizations may not make hard money campaign contributions but may conduct limited partisan activities directed at their restricted class, rather than the general public. Beyond executive administrative personnel, the restricted class for corporations is shareholders, and for unions and membership groups, it is members, and families are also included. The organizations are allowed to set up and operate a PAC to solicit and receive voluntary contributions, expressly advocate, or solicit others to voluntarily support a candidate or party, and conduct partisan or nonpartisan voter registration and get out the vote. drives. It is impossible to know exactly how much is spent on these activities since hardly any of these expenditures are reported to the Federal Elections Commission. It is clear, however, that business groups put considerable resources into establishing and operating PACS which solicit their relatively affluent restricted class. In the 1998 election, 2,321 business PACS collected $166 million of which 65 percent went to Republicans, or a total of $107 million, while 237 labor PACS harvested $51 million, 91 percent of which went to Democrats for a total of $47 million. On the other hand, labor traditionlly concentrates money, and especially staff efforts, to mobilize voters from its far less affluent but numerous restricted class; approximately 16 million unionized workers. Mr. Chairman, a frequently cited estimate of the actual cost of such union activities is $300 million to $500 million. It appears that the principal source of this is testimony given by Professor Leo Troy of Rutgers who was here this morning. At that time, Professor Troy said he based his estimate of union time, effort, and resources spent on political mobilization on a "multiple of three to five times" the $95 million he said was spent by labor PACS in the 1991-1992 election cycle. He called this a rule of thumb. In a recent conversation with Public Citizen staff Professor Troy acknowledged there is no specific evidence he could cite to justify his rule of thumb, and that the real figure could well be $150 million or $450 million. Unlike the well-documented economic multiplier, Professor Troy's political multiplier has no basis in fact. The CHAIRMAN. Ms. Claybrook, how close are you to the end? I said I was going to wield a mean gavel here so we could all-— Ms. CLAYBROOK. I had to talk about Professor Troy because he was here. I will try and rush this through. As my statement describes in detail, there are other groups, of course, besides labor unions, such as the National Rifle Association, the National Federation of Independent Business, the National Association of Realtors and others, as well as the Christian Coalition who are very deeply involved in the political process in mobilizing their members and who are on the conservative side of the banner. Fourth, it is misleading to brand labor unions' use of member dues for political purposes as compelled speech, and I think it is a fatally flawed argument. By law and administrative rulings, no worker in the United States can be required to pay union expenses other than those associated with collective bargaining, grievance adjustment, and contract administration. Therefore, no worker can be compelled to pay for union involvment in Federal elections. I will skip over my testimony. I presume that the whole testimony will be inserted in the record. The CHAIRMAN. Absolutely, yes, it will. I will be equally strict with Mr. Hunter, so this it not a question of discrimination. Ms. CLAYBROOK. But I would like to get to the major point on this issue of compelled speech which is that there was a decadelong series of lawsuits during which the procedures for implementing the Beck decision began to be elaborated. The National Labor Relations Board in December 1995 detailed procedures that unions had to follow to transform the generalities of the Beck decision into a workable system that was fair to those that the union represented. In California Saw and in United Paper Workers, the board held that unions must inform all employees, including newly-hired nonmembers before asking them to pay dues, that they have what is called a General Motors right (under a prior case), not to be a member of the union. And that non-members also has the right to object to paying for union activities not germane to the duties of bargaining, and to obtain a reduction of fees, to be given sufficient information to be enable them to intelligently decide this, and to be apprised of any internal union procedures for filing objections. And if an objector challenges a union's calculations, the union bears the burden of proving their accuracy. Employees who believe that they have been mistreated have recourse to the NLRB and the Federal court system. And the NLRB has elaborated this system over the last four years. We reviewed at least 20 cases in 1999, ruling on a number of the particulars procedural issues. I would say that contrary to what Senator Nickles said, that reduction must occur immediately. There is no charge and then rebate. That is just not correct. So in short, there is a system of legally established rights and operational procedures. Certainly nothing works perfectly in practice, but I am aware of no objective inquiry that has challenged the fundamental integrity of this system. So I think it is simply inaccurate to talk of generally "compelled speech" by union members and that legislation to endow these members with so-called free speech is not only unnecessary but would add confusion to what is now an operational system of protecting worker's rights in relationship to their union activities. Even if it did appear that there were some operational problems, these would be of a far different order than the problems of soft money and phony issue ads, for which there are no procedures and no rules at all in the political system. I thank you very much, Mr. Chairman. [The prepared statement of Ms. Claybrook follows:] PREPARED STATEMENT OF JOAN CLAYBROOK, PRESIDENT, PUBLIC CITIZEN, Mr. Chairman and Members of the Committee, Good morning and thank you very much for inviting me to testify at this important hearing on alleged "compelled speech" by union members in the context of campaign finance reform. Various so-called "paycheck protection" proposals have been introduced in Congress over the last several years. In general they aim to stop unions from spending any of their members dues on political campaigns and activities without individual authorization. Lately, opponents of major campaign reform bills banning soft money to political parties and regulating phony issue ads have stepped up their insistence that so-called "paycheck protection" must be part of any meaningful campaign reform bill. What I would like to discuss today is why the basic assumptions behind this demand are fatally flawed. I believe we at Public Citizen are particularly well equipped to give the Committee a broad perspective on this issue because, in addition to our historic involvement in campaign finance reform, our Litigation Group for twenty-five years has long represented dissidents in labor unions to assure that internal democracy flourishes. What we hear from the opponents of the McCain-Feingold and Shays-Meehan reform bills is something like this: Don't ban soft money, which mostly comes from corporations, without curbing the "compelled" use of union dues for partisan union political campaigns. Otherwise, you will significantly weaken pro-business forces and enable union-supported Democratic candidates to swamp the Republicans. There is little or no factual basis for the various components of this argument. I will elaborate. 1. Even without soft money, pro-business forces maintain an overwhelming advantage over pro-union ones in contributions to candidates and parties and in lobbying expenditures. Looking at contributions data from the Center of Responsive Politics during the 1998 election cycle, and not counting soft money, individuals and political action committees (PACS) associated with business outspent those affiliated with labor unions by 10 to 1 ($500 million to $51 million). Including soft money, the ratio is a slightly higher 11 to 1 ($667 million to $61 million)1 Furthermore, business's advantage in expenditures for lobbying federal officials is even more astronomical: unions spent $24 million in 1998, a small fraction of what was spent by numerous major industries including: finance, insurance and electronics ($203 million), communications/electronics ($186 million), miscellaneous business ($172 million), health ($165 million), energy and natural resources ($144 million), agribusiness ($119 mil 1 Center for Responsive Politics, The Big Picture: The Money Behind the 1998 Elections (September 1999), pp. 38-40. lion), transportation ($115 million), and defense ($48 million)2—a total of $1.15 billion for these industries. This financial reality helps explain why a leading business group like the Committee for Economic Development can come out in favor of a ban on overwhelmingly corporate soft money without feeling that its interests will be endangered. 2. Even without soft money, Republicans have a large campaign contributions advantage over Democrats. 3 Not counting soft money, in the 1998 election Republicans raised $734 million while Democrats raised only $533 million. Moreover, the Republican Party had a greater margin of superiority over the Democratic Party in hard than in soft money (Republicans raised 65% of total hard money but only 59% of soft money) 4. It is therefore arguable that the Republican Party would gain relative strength by abolishing soft money! 3. Pro-business and pro-Republican groups as well as labor unions use their treasuries in limited ways under the law to support partisan organizational campaigns. Under the Federal Elections Campaign Act, corporations, unions and membership organizations may not make hard money campaign contributions but may conduct limited partisan activities that are directed at their "restricted class" rather than the general public. Beyond executive/administrative personnel, the restricted class for corporations is shareholders; for unions and membership groups, it is members. Families are also included. All the organizations are allowed to spend treasury money directed at their restricted class to: • set up and operate a PAC to solicit and receive voluntary contributions expressly advocate or solicit others to voluntarily support a candidate or party • conduct partisan or nonpartisan voter registration/get-out-the-vote drives It is impossible to know exactly what is spent on these activities since hardly any of these expenditures (with the exception of communications that are primarily express advocacy totaling over $2000) are required to be reported to the Federal Elections Commission. It is clear however that business groups put considerable resources into establishing and operating PACS which solicit their relatively affluent restricted class to give money. In the 1998 election, 2,321 business PACS collected $166 million of which 65% went to Republicans ($107 million), while 237 labor PACs harvested only $50 million, 91% of which went to Democrats ($47 million). 5 On the other hand, labor traditionally concentrates money and especially staff on efforts to mobilize voters from its far less affluent but numerous restricted class (16 million unionized workers and their families). For example, the AFL-CIO s proDemocratic "Labor 1996” program included: distribution of 11.5 million voter guides to members comparing candidates in conjunction with 114 congressional elections and two Senate races; 5.5 million phone contacts; organization of public events (often in coalitions); and mass voter registration and get-out-the-vote programs. 6 Mr. Chairman, a frequently cited estimate of the actual cost of such union activities is $300 million to $500 million. It appears that the principal source of this estimate is testimony given before the House Committee on Oversight in 1998 by Prof. Leo Troy of Rutgers University. At the time, Prof. Troy said he based his estimate of union "time, effort and resources" spent on political mobilization on "a multiple of 3 to 5 times" the $95 million he said was spent by labor PACs in the 1991-92 presidential election cycle. He called this “a rule of thumb.”7 In a recent conversation with Public Citizen staff, Prof. Troy acknowledged that there was no specific evidence he could cite to justify his "rule of thumb" and that the real figure could well be, say $150 million or $450 million. It should be noted that even under Troy's 2 Ibid. p. 92. 3 Ibid. p.2. 4 Federal Election Commission, "FEC Reports on Political Party Activity for 1997-98," April 1999, pp. 4-7. 5 Center for Responsive Politics, The Big Picture. p. 39. The number of business and labor PACS was reported in a telephone conversation with the Center's research department. Robin Gerber, "Building to Win, Building to Lawt: AFL-CIO COPE Takes on the Republican Congress," in Robert Biersack, Paul S. Herrnson and Clyde Wilcox, After the Revolution (Boston: Allyn and Bacon, 1999), pp. 77-93. 7 Committee on House Oversight, U.S. House of Representatives, Influencing Political Activity of Labor Unions, Hearing, March 21, 1996 (unpublished transcript), written statement of Prof. Leo Troy and oral testimony, p. 35. |